Growth in Honduras is due to remittances and strong export performance. Nevertheless, over 59% remain below the poverty line and 36.2% in extreme poverty. Bank and government work together to reduce vulnerabilities and create opportunities for all.
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This report uses household surveys to
provide a diagnostic of poverty, human development, and
access to basic infrastructure. The report is based on
analytical work... Show More + conducted by a team comprising staff from
the World Bank, Honduras' "Programa de Asignacion
Familiar (PRAF), and the International Food Policy Research
Institute (IFPRI). The objective of the present report is
limited. It provides a diagnostic of the state of poverty
and other indicators of well-being instead of suggesting an
overall poverty reduction strategy or providing detailed
policy reform options. It is intended as an imput for the
Government's Poverty Reduction Strategy Paper (PRSP)
within the context of the country's participation in
the Heavily Indebted Poor Countries (HIPC) Initiative for
debt relief. Some key findings are: There is uncertainty as
to the change in poverty because different assumptions used
for poverty measurement have lead to different conclusions
as to the trend in poverty in the 1990s. The probability of
being poor increases with the number of babies and children,
the fact of being from an indigenous population, and the
fact of having a household head unemployed, underemployed,
and/or female. Poverty decreases with education and
employment in non-agricultural occupations. Geography and
programs for rural productivity also reduce poverty.
Progress is suggested by the Human Development Index and the
fact that the share of all households nationally with no
unmet needs increased. Show Less -

This report has three objectives: 1) to
serve as an input to the new administration to design a
policy for the health sector. The new health sector policy
should se... Show More +rve as an instrument for improved donor
coordination; 2) to facilitate a dialogue between the
Economic Cabinet, concerned with perceived inefficiencies in
the use of public funds and in the effectiveness of
externally-financed programs, and the authorities
responsible for the social sectors, concerned with equity
and safety; and 3) to define possible IDA support for the
health sector. The report discusses the challenges that need
to be faced to modernize public sector financing, to improve
public sector service provision and to develop an
appropriate policy and regulatory framework for
pharmaceuticals and social security. Show Less -

"Reforming public investment and
the infrastructure sectors" is a report based on the
findings of a visit to Honduras in December 1994. High
levels of public inves... Show More +tment (PI), low levels of savings and
an inefficient system of regulation for the provision of
infrastructure services constitute a key obstacle to
macroeconomic stability and growth in Honduras. Public
investment is high because the state has replaced private
investment by monopolizing key economic areas and by
regulating these areas in ways that restrict or prevent
private participation and competition. The role of the
state is thus to be redefined in a way that allows the
economy to rely more on the market for efficiency and on the
private sector for financing. A successful reform of PI and
the provision of infrastructure, therefore, needs to
confront three key issues: 1) lack of strategy in PI
programming and procedural weaknesses in PI implementation;
2) inefficiency and obsolescence of the regulatory framework
for the provision of infrastructure services - it combines
excessive control over areas which require autonomy, with
lack of regulation over areas of public interest that
require oversight; and 3) need of an explicit strategy for
poverty reduction to be developed in order to guide
investment in infrastructure for the social sectors. Show Less -

This country economic memorandum, the
first for Honduras since 1987, focuses on policies for
macroeconomic stabilization and poverty alleviation. It
contains a Pove... Show More +rty Assessment and addresses three main
areas: fiscal policy, agriculture and the social sectors.
Honduras has suffered from varying degrees of fiscal
instability for the last two decades. Recently, this has
become chronic. Significant fiscal deficits intensify
poverty, first because the consequent macroeconomic
instability hits the poor hardest and is not conducive to
savings, investment and growth; and second, because they
severely limit the fiscal space available for targeted
programs. In the social sectors, there are serious
inefficiencies and misallocation of resources and
insufficient focus on the needs of the poor. Agriculture is
key to Honduras' ability to grow more rapidly in an
equitable manner: society is largely rural, an overwhelming
majority of the poor earn their livelihood in agriculture,
and agricultural products generate 80 percent of export
earnings. This report addresses the key policies and
structural reforms required to: 1) underpin a substantially
improved fiscal performance; 2) promote more rapid and
equitable growth in agriculture; and 3) ensure more
effective use of public resources in the social sectors and
strengthen existing efforts to target the poor. Show Less -

The study contains an assessment of the
public sector issues in Honduras, and a set of
recommendations to increase the internal efficiency of the
public sector and ... Show More +its contribution to the Honduran economic
development. The study lays down the foundation for a
policy dialogue and subsequently for a possible IDA credit
in support of a public sector reform. The first section of
the report reviews the macroeconomic context and identifies
the need for public sector reform in order to ensure the
sustainability of progress made under the current economic
program. An assessment of the Honduran public sector is
presented in the second section, and the last section
discusses three areas for public sector reform proposed by
this study: Administrative Reform, Reform of Public Sector
Management, and Reform of the Decentralized Administration. Show Less -

The study contains an assessment of the
public sector issues in Honduras, and a set of
recommendations to increase the internal efficiency of the
public sector and ... Show More +its contribution to the Honduran economic
development. The study lays down the foundation for a
policy dialogue and subsequently for a possible IDA credit
in support of a public sector reform. The first section of
the report reviews the macroeconomic context and identifies
the need for public sector reform in order to ensure the
sustainability of progress made under the current economic
program. An assessment of the Honduran public sector is
presented in the second section, and the last section
discusses three areas for public sector reform proposed by
this study: Administrative Reform, Reform of Public Sector
Management, and Reform of the Decentralized Administration. Show Less -

Honduras is in the midst of a structural
adjustment process that has fundamental implications for
social programs. The report recommends redirecting a portion
of pu... Show More +blic resources to education and health care for the
poor with no loss in terms of social services given to
households. This could be done by encouraging greater direct
household purchase or cofinancing of such social services as
retirement and dependents' insurance, secondary,
technical and higher education, curative health care, and
housing. The strategy for the social sector restructuring
is divided into the following six steps: (i) Prepare an
agenda for reform of social programs; (ii) prepare a plan to
verify and document the results of implementing the agenda
of reform; (iii) reduce the earmarking of revenues to
specific programs; (iv) shift resources to favor more
spending on primary and remedial adult education, primary
health care, and increase resources for targeted nutrition
programs; (v) review staffing requirements for teachers and
health workers to determine career development, wage setting
practices, and means to increase efficiency in delivery of
these services and; (vi) enhance local control over the
quality and delivery of social services by giving local
committees control over user fees, copayments, and other
income generated by the sale of public services. Show Less -

The World Bank supports economic
adjustment in Central Ameria and seeks means to provide
complementary programs for public social spending that can
alleviate povert... Show More +y. With that object in mind, the Bank
convened a workshop within the Consultative Group framework,
that brought together representatives from Central American
governments and the donor community to discuss plans for
social programs and the need for related technical and
financial assistance. Three country programs, those of
Guatemala, El Salvador, and Honduras, were given particular
attention because of their innovative approaches to social
program design that can be supported through social
investment funds. These funds are expected to offer
effective mechanisms to improve the efficiency of service
delivery in population, health, education and nutrition
programs, and to intensify efforts to extend these services
on an equitable basis to the poor. This report includes a
report of discussions and background papers prepared by Bank staff. Show Less -

The two critical areas of the Honduran
energy sector which require the most improvement and support
are petroleum product procurement and social forestry
projects. ... Show More +With that in mind, Honduras' energy strategy
should then focus on: (i) optimizing the contribution of
forest resources to the economy; (ii) purchasing petroleum
products at the least-cost supply option; (iii) optimizing
the use of electricity available from the El Cajon hydro
project; and (iv) improving the overall coordination of the
energy sector. The basic objective of Honduras'
strategy in petroleum should be to obtain petroleum supplies
at least cost and to improve the collection of oil revenues
from the sales of petroleum products. Regarding forestry,
this sector may well become the backbone of the Honduran
economy, although it has not yet received the attention
necessary to achieve its true potential. The Government of
Honduras (GOH) needs to develop an integrated forestry
program and consider the expansion of the ongoing social
forestry management projects. Further to this, El
Cajon's hydro generating plant's excess capacity
may offer the only significant contribution in the short
term through international electricity sales to minimizing
the National Electric Power Company's (ENEE) financial problems. Show Less -

This report analyzes structural problems
in the Honduran economy and describes the main policy
directions enunciated by the Government that took office in
January 1... Show More +986. The report focuses on the country's
medium-term economic prospects amidst the unsettled
political climate in the region, argues that orientation of
the economy on a sustainable growth path will require the
adoption of a comprehensive program of policies aimed at
establishing a macroeconomic environment more conducive to
both domestic and foreign private investment, and attempts
to identify the elements of such a program. The report also
pinpoints the weakness in medium-term prospects for
traditional exports as a key constraint to accelerating
growth, and stresses the need for liberalization of the
trade regime and a concerted export drive to countries
outside the Central American Common Market (CACM). It also
notes that adoption of a comprehensive medium-term program
for economic adjustment and growth would be essential to
underpin any successful export drive. Specific policy
measures aimed at strengthening resource mobilization,
increasing the efficiency of resource use, and accelerating
growth in the agriculture and industry sectors are identified. Show Less -

The report analyzes the performance of
the Honduran agrarian reform program to assess its
achievements, the impact on the campesinos and the problems
confronted in ... Show More +carrying out the program. It also analyzes
expected population growth and the resulting pressures on
natural resources, rural migration and employment, and
number of landless peasants. The report arrives at proposals
for policy action to improve the situation of small farmers
and agrarian reform beneficiaries. The report is divided
into four major parts: I) Introduction; II) Population
Pressures; III) The Small Farmer; and IV) The Agarian Reform. Show Less -

For the next few years, development
strategy for the Honduran government is to support both
industrial and agricultural growth with large infrastructure
investments... Show More + and expanded credit availability and accelerate
the implementation of social projects, particulary for rural
development, health, education, safe water and sewerage, and
housing. This will require maintaining prudent fiscal and
financial policies to finance the ambitious development
program in a noninflationary manner, and reactivating
private investment by stepping up efforts to promote private
activities, particulary exports. In addition, the government
should avoid further expansion in productive activities
which have proven unprofitable. A favorable growth scenario
is possible for the 1980s, but long-term prospects are less
certain. Longer-term programs and policies should focus on
development of rural areas and should promote dynamic
private sector participation. Essential to this is an
effective and efficient agricultural public administration.
Furthermore, rationalizing urban development should have
high priority. Show Less -

An update of the last report on Honduras
is needed because of the substantial improvement in the
balance of payments. Better export prospects are expected
because o... Show More +f higher coffee prices, rapid recovery of banana
production, and completion of some export-oriented projects;
and a lower debt service resulted from lower external
borrowing and higher exports than projected. However, fiscal
performance has fallen below expectations, and the domestic
financing problem is emerging as more acute than the
external as identified in the earlier report. Development
efforts over the next five years include a large public
investment program; an export drive in forestry,
agriculture, and tourism; a stepped-up program of financial
support for agricultural development; and a continuation of
the agrarian reform and other social programs to improve the
distribution of income and wealth. This represents an
ambitious investment program, particularly for the El Cajon
hydroelectric project, and it depends heavily on the
domestic savings effort and on the ability of the government
to raise part of the required external financing on
concessionary terms. Show Less -

Honduras is one of the poorest countries
in the Western Hemisphere and continues to be predominantly
a land of small farmers obtaining a meager living by
primitive ... Show More +methods. The natural resource base is limited and
often poorly utilized. Apart from the coastal plains and
some inland river valleys, the predominance of steep rugged
terrain seriously limits the agricultural potential.
Continued sluggish performance of the economy has resulted
from variations in banana output; deficient credit,
technical services, and development programs for
agriculture; the continued shortage of basic infrastructure
and of a well-trained labor force; and the absence of a
dynamic domestic entrepreneurial class. Development strategy
over the next few years calls for large public investments
in infrastructure, in export diversification through
forestry development, in tourism, and in agriculture to
implement the land reform program. The growth objective
requires that priority be given to productive investments, a
major illustration being construction of a large
hydroelectric project. In addition, the efficiency of public
spending in education must be improved. Show Less -

Honduras is a small, export-oriented
economy that is heavily dependent on banana production.
Economic growth 1969-72 was low, but the situation improved
remarkably ... Show More +in 1973 under the new administration. The new
government assigned first priority to agricultural
development because of the stagnation of food production,
extreme poverty of the rural population, and increasing
agrarian unrest, with an ultimate aim of efficient land
utilization and improved rural living standards. Medium-term
prospects should be good, but the success of development
planning will depend on the timely preparation and executive
of specific programs. Two major projects that would boost
export earnings are a steel plant and a large forestry
products plant. The greatest constraint results from
institutional factors that create and maintain dualism and
lead to underutilization of resources rather than from a
lack of labour, capital, or natural resources. Increased
financial resources required are to be derived from the
efficient exploitation of forest resources, from
international lending institutions, and from an anticipated
general reform of the tax system. Show Less -

Honduras has a limited resource base,
and variations in banana output and political changes have
traditionally been the main determinants of the pace of
economic gr... Show More +owth. Current economic problems coincide with the
exacerbation of long-standing social problems. The burden of
decisions to revitalize the economy will fall upon the
government, in the absence of a major expansion of private
investment for banana exports. Three major areas warrant
attention: public investment and development expenditures;
setting the basis for the orderly but rapid development of
Honduras' large forest resources; and working out a
basis for renewed Honduran participation in CACM. A major
effort to upgrade administrative capacity and resolve the
fiscal problem will be required. A key to the prospects of
the economy in the next few years will be the ability of the
authorities to prepare projects and programs suitable for
long-term external financing. For this to happen,
coordination between the various agencies and the Planning
Office needs to be substantially strengthened. Show Less -

Honduras is currently debating the size
and thrust of the development effort to be made during the
next few years. Since the outcome will have important
effects on ... Show More +the evolution of the Honduran economy in the
1970's, the main focus of this report is on the major
issues confronting the Hondurans and their external lenders
in this debate. After a very brief introduction, the second
chapter of the report discusses these major development
issues. Chapter three deals with the specifics of public
investment, and it's financing for the next five years.
The final chapter surveys the main features of the Honduran
economy, its recent economic performance and prospects. It
also discusses the possible consequences of the hostilities
with El Salvador, which began after the Bank's mission
to Honduras had completed its field work. An appendix deals
with the demographic and social characteristics of the country. Show Less -

Honduras is currently debating the size
and thrust of the development effort to be made during the
next few years. Since the outcome will have important
effects on ... Show More +the evolution of the Honduran economy in the
1970's, the main focus of this report is on the major
issues confronting the Hondurans and their external lenders
in this debate. After a very brief introduction, the second
chapter of the report discusses these major development
issues. Chapter three deals with the specifics of public
investment, and it's financing for the next five years.
The final chapter surveys the main features of the Honduran
economy, its recent economic performance and prospects. It
also discusses the possible consequences of the hostilities
with El Salvador, which began after the Bank's mission
to Honduras had completed its field work. An appendix deals
with the demographic and social characteristics of the country. Show Less -

As of 1965, Honduras remains the poorest
of the Central American republics. Its economic growth is
strongly dependent on export trends, with exports heavily
concent... Show More +rated in bananas and coffee. From 1963 to 1965,
remarkable acceleration in exports drove a significant
increase in gross national product. In addition to increases
in export earnings from bananas, coffee, and cotton, exports
of industrial manufactured products has doubled since 1958.
Since the present Government came to power in 1963, a
pattern of sound internal financial management has
continued. By 1965, the realized deficit had virtually
disappeared and the Government was able to repay debt and
accumulate deposits and foreign reserves. The growth in
revenues is due largely to tax reforms introduced in 1963
and the introduction of a new sales tax. The report expects
a sharp increase in public investment in 1966 due to two
reasons. First, there is increasing concern felt in Honduras
regarding the need to expand economic infrastructure in
order to make Honduran enterprise more competitive in the
Common Market. Second, the prospect of a significant decline
in the growth of export earnings may spur a program of
diversification, to include the timber and beef industries.
The report suggests that additional investments of US$100
million may become eligible for external financing during
the 1965 to 1970 period. Taking into account the prospects
for imports, exports, and the gross national product, the
report finds that the level of public savings in Honduras is
still inadequate in terms of the country's development
goals. Honduras is not expected to finance, from 1965 to
1970, more than 20 or 30 percent of projects eligible for
external lending. These considerations point to the
desirability of some portion of new assistance being made
available on concessionary terms. Show Less -